Law: Income Tax Act, 1922

Section: 3,18,18(3B)(7)3,4(1)(c),42,43,23,29,42,4 5,46

(a) Income-tax Act (XI of 1922)---- Ss. 18(3-B) (7) 3, 4(1) (c), 42 & 43-Expression "unless he is himself liable to pay any income-tax and super-tax thereon" it S. 18(3-B)­ Interpretation-Word "liable"-Meaning-Residents and non-residents of Pakistan, are alike chargeable to tax in respect of income, profits or gains accruing in Pakistan-Agent can be made vicariously respon­sible for substantive liability of non-resident to tax-Income-tax Officer has option either to assess non-resident in his own name or in name of his agent in Pakistan who for purposes of Act shall be deemed to be assessee-Income-tax Officer by repeated letters addressed to assessee indicating intention of treating assessee as agent of non­ resident Company in accordance with requirements of S. 43-Held, there could be no escape from proposition that assessee was appointed and must be deemed to be statutory agent of non-resident Company for purposes of Income-tax Act, 1922 and assessee, therefore, could not resile out of that situation as created by Income-tax Officer in circumstances-Income-tax Officer, in spite of appointing assessee as statutory agent of non-resident Company, if not finalized assessment in name o:' agent was not precluded from framing assessment against non-resident Company directly in its own name-Person responsible for paying any sum to non-resident was himself liable to pay income­ tax or super-tax thereon "as agent" and he was not entitled to make deduction at source-Person is said to be "himself liable to pay" income-tax or super tax "as an agent" within meanings of S. 18(3-B) only after agent for non-resident was assessed in his own name in accordance with S. 42-Assessment when made in name of agent, agent becomes assessee for all .purposes of Act and tax due from non-resident-Mere fact that Income-tax Officer had appointed a statutory agent in Pakistan for a person residing outside Pakistan in accordance with S. 43 does not necessarily meant that agent was "himself" liable to pay any income-tax due from non-resident-Liability of agent himself and to personally pay tax due from non-resident arose only after assessment had been completed in his name as agent and he was…

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